What is insurance fraud?
Insurance fraud is an attempt to obtain money from insurance
companies by arranging a loss or accident or falsifying information
on applications for insurance claims. Fraud can range from large,
organized operations involving hundreds of thousands of dollars to an
otherwise honest individual who overstates a legitimate claim.
What is the penalty for being found guilty of insurance fraud?
In most of its forms, insurance fraud is a felony. When caught,
prosecuted and found guilty, most fraud perpetrators are required to
make restitution and jail time is also commonly imposed.
What is the most common types of fraud cases?
Insurance fraud can be divided into three categories: false claims
for injuries; arson for profit; and false or intentional auto theft
and physical damage.
What is the insurance industry doing to reduce fraud?
The insurance industry is committed to reducing fraud by teaching
claims professionals how to recognize suspicious claims and work with
law enforcement and fir services. Insurance companies have units
trained to investigate fraud.
What can citizens do to reduce fraud?
People who want to fight back against this crime can call their state
department of insurance and report the crime.
What effect does fraud have on the average insurance policy holder?
The insurance industry estimates the size of insurance fraud to be
about 10-15 percent of the premium dollar. This puts the yearly costs
at an estimated $18 billion nationally. As fraud is reduced or
eliminated, clams costs can be lowers and those savings can be passed
on to policyholders.